The coronavirus pandemic really was a turning point, not just for the financial industry but for the whole world. Many had plans and goals that they wanted to achieve before the end of the year, but they had to stop. Some companies had to file for bankruptcy and people lost their jobs.
Like all sectors of the global economy, the financial sector has suffered significantly from the effects of the pandemic. Countries are struggling to keep their economies alive while people have searched for means to stay liquid
It goes without saying that stock markets and financial institutions around the world You are currently exceptionally vulnerable. This is a danger the world has never seen before. Not even the global financial crisis of 2008 could prepare us for the impact COVID-19 will have on the global economy.
However, One sector that has managed to weather the storm so far is the cryptocurrency market. While Bitcoin (BTC) fell to $ 3,800 in March, the value of the major cryptocurrency rose and consolidated faster than any other investment vehicle in the world.
The stock market has just started its recovery and alternative assets remain in their eternal state of volatility. However, cryptocurrencies have gotten stronger.
Understand the types of cryptocurrency investors
When it comes to cryptocurrency investors, There are basically two types:
- Private investors: ordinary people who want to buy cryptocurrencies for various reasons, especially as an investment and payment method.
- Institutional investors: high net worth individuals and companies looking to speculate and invest in assets.
Many may argue about how retail investors reacted to Bitcoin over the course of the pandemic. Using data to back up your facts. However, institutional demand is much easier to measure.
Fortunately, The institutional demand for Bitcoin and other cryptocurrencies seems to be at an optimal level.
Asset management company performance
One of the best ways to understand this trend is to study how many institutional investment and wealth management firms there are. So far, many of them have seen significant gains.
This month the asset management company, Pantera Capital announced to the US Securities and Exchange Commission (SEC) that the Pantera Venture Fund III has raised USD 164,705,834 to date. The fund, launched in 2018, raised USD 68,841,379 from its accumulated audience in the past 12 months.
The average amount of inflows from Pantera investors over the same period was $ 1.77 million, more than four times the 2019 level and almost double the 2018 level. As the company stated, that number represented a surge in institutional investor interest, its primary market.
No institutional investment firm has done better in the crypto industry than Grayscale Investments. based in New York. Grayscale is currently the largest asset management company in the crypto industry. The company saw big gains over the past year as Bitcoin finally bounced back from the 2018 crash.
However, In 2020, the company saw even better numbers across the board. Last month the company was listed in a Tweet that total assets under management increased to USD 5.1 billion, an increase of around $ 1 billion in less than two weeks.
The company said it had doubled its Bitcoin Cash (BCH) fund’s assets under management from $ 6 million to $ 12.8 million. His Bitcoin trust saw the biggest gains at $ 782 million. The Ethereum (ETH), Ethereum Classic (ETC) and Litecoin (LTC) funds increased by USD 174 million, USD 12.7 million and USD 6.7 million, respectively.
Total, Grayscale confirmed its assets under management are $ 5.2 billion. Of this, USD 4.4 billion corresponds to Bitcoin.
Grayscale attributed its growth to a commercial blitz that launched Bitcoin and cryptocurrency investments to a large audience. Whether it is true or not, the fact that their numbers have grown so impressively means it Institutional investors are seriously considering investing in cryptocurrencies.
Opportunities for everyone
All of these facts point to this to many who are promoting Bitcoin as the most reliable hedge against the looming global recession.
Tahini’s, a Canada-based restaurant in the Middle East, confirmed in one thread Twitter earlier this week that it had shifted its entire pool of assets to Bitcoin when the pandemic started. The restaurant said the Canadian government poured more money into the economy to help maintain liquidity and avoid business closings. While both the restaurant and the government understood the reason, they also knew the implications.
So far, the decision has helped the restaurant. CoinMarketCap data shows that bitcoin rose from $ 6,720 on March 25, the day the Canadian government announced its grant plan, to hit $ 11,500 on the day Tahini tweeted.
The views and opinions expressed here are those of the author only and do not necessarily reflect the views of Cointelegraph.
Tanvir Zafar is an experienced crypto blogger. He was nominated for Independent Crypto Journalist of the Year award. He is passionate about related topics related to cryptocurrencies and finance.